Nashik, Oct 14 (UNI) Terming the recent hike in taxes by the Karnataka government on all Indian wines 'imported' into the state as fallout of earlier Maharashtra government's decision, Mountain View Winery Pvt Ltd, Managing Director Hambir Phadtare today demanded for 'National Permit' for the wine industry on par with the transport industry.
Effective from August 1, the Karnataka government has started levying a tax on all wines of Indian origin 'imported' into Karnataka. The new levy raises the import fee on wine from outside Karnataka from Rs 10 to Rs 300 per bulk litre, an increase of Rs 217.50 per bottle. Add to this, other levies and margins that will subsequently accrue, thus raising the retail price by approximately Rs 250-280 per bottle.
Karnataka is the second highest consumer of Nashik wine in India. Nashik, the 'Wine Capital of India', sells three to five lakh wine bottles each year in Karnataka. The new hike in taxes by the Karnataka government will cause a loss of Rs 10 to 15 crore to Nashik wine industry, said Pradeep Pachpatil, President of Nashik Valley Wine Producers' Association. He is also Vice President (Winery Operations) of Sula Vineyards.
55 per cent of all wines sold in Karnataka are currently priced between Rs 350-550 per bottle. The Rs 250 increase translates to a 46-80 per cent increase in final price, if it is Rs 280, it is almost 100 per cent. Lower priced, entry level wines like UB's 'Zinzi' will see their prices go up by over 100 per cent from Rs 250 to Rs 500-530. The wines produced by Grover's and Naka in Karnataka, will be spared the tax.
The hike will affect the wine industry and its marketing. A few years ago, the Maharashtra government had imposed a special tax of 150 per cent on wines 'imported' into the state from outside, bowing to the pressure of the lobby here. The 150 per cent tax made non-Maharashtra wines more expensive in the state.
The wine producers of Karnataka, found it hard to compete in Mumbai, the economic capital of India and capital of the state.
Half-hearted attempts by the Karnataka Government to resolve this issue with their Maharashtra counter-parts have not yielded positive results, he told UNI.
Every state tries to levy heavy taxes on wine products from other states in an attempt to increase the sell of their products. This affects the industry badly. Our products should reach other countries. Wine producers from Maharashtra and Karnataka should not fear competition, he said.
There are several Central government, state government taxes as well as many restrictions. Label registration for a single brand costs Rs 1.5 lakh. This also hampers the business. There should be 'National Permit' for the wine industry on par with the transport industry and registration of brands, labels should be done at one place, Mr Phadtare demanded.
Maharashtra is India's California, the leading producer of wines.
About 18 'non-Karnataka' (Indian) wine producers such as Sula, Indage, Reveilo, Nine Hills, Mandala Valley and Big Banyan, and about 27 foreign producers sell their wines in Karnataka.
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